How the KISS Prinicple is Powering GE’s Digital Solutions Unit

Throughout the years, I’ve extolled the KISS principle, an abbreviation of Keep it Simple, Stupid. Over complicating matters rarely generates benefits greater than the drawbacks associated with all the complication. GE stumbled on the same idea when it combined three digital businesses into a single Digital Solutions unit a few years ago. The business was having trouble generating new business because it took potential clients months to parse through GE’s reams of contract language. To speed up business and boost revenue, GE focused on creating a single plain language contract to replace its seven different contracts that were gumming up its business. Kristin Kloberdanz writes for GE Reports:

That’s when Shawn Burton, Digital Solutions’ general counsel at the time, aided by a squadron of intrepid employees spread across GE, decided to deploy a disruptive and unconventional contract weapon: plain speak. Burton harked back to his law school days when he studied Plain Language, a way to condense the written word to the clear basics. He dusted off his textbooks and, with the help of his GE language commandos, used it to write a new contract. “I applied a litmus test: If someone in high school couldn’t pick this up and understand it without any context, it wasn’t plain enough,” he says.

Burton then launched a Plain Language workshop for his team where he actually dropped the old contract into a garbage can with a satisfying thud.

It took Burton and his team more than a month to write an initial draft from scratch without referencing the existing contracts or any other GE contract. The new contract covered the necessary legal concerns of all the digital services, thus reducing the number of contracts from seven to one. Astonishingly, the draft was only five pages long.

He was able to compress statements and sentiments that previously ran on for paragraphs or even pages into just one or two sentences. For example, the so-called “force majeure” clause — a standard contract clause — in an old contract read: “Neither Party shall be liable or be in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources), transportation shortages, or Customer’s failure to perform (each an “Excusable Delay”).”

Burton abbreviated the mouthful to a single simple sentence: “Neither party will be liable for failing to perform any obligation in this contract resulting from circumstances beyond the party’s reasonable control.”

At the corporate level or in your own investment portfolio, it’s imperative to Keep it Simple. Read more here.